Copper: A Disconnect On What the Future Holds

By MetalMiner:By Stuart Burns
Delegates at the recent CESCO Copper Conference in Chile from both the major miners and the major copper producers lined up for interviews, giving a not surprisingly similar and upbeat view of the market. In a Reuters report on the conference, industry experts predicted similar views of the future:

Copper prices would dip this year in the second quarter and possibly third before picking up in Q4

Treatment charges would remain depressed, probably around the low $20/ton range until the end of this year as concentrate supplies remained tight

Mines, particularly in Chile, Peru and at Rio’s Kennecott Utah copper mine would pick up as better ore grades were extracted and disruptions due to weather and strikes were put behind them

No one would admit to being worried about rising Shanghai Futures Exchange (SHFE) inventory, currently a million tons, saying it would come down this year as

Related

The U.S. mining industry was dealt a devastating blow as Kennecott Utah Copper’s Bingham Canyon Mine experienced a pit wall failure, causing a massive landslide with rocks and dirt covering the bottom of the mine pit. It’s a miracle no one was hurt, due to the vigilance of its owner, Rio Tinto.

The U.S. mining industry was dealt a devastating blow as Kennecott Utah Copper’s Bingham Canyon Mine experienced a pit wall failure causing a massive landslide with rocks and dirt covering the bottom of the mine pit. It’s a miracle no one was hurt due to the vigilance of its owner, Rio Tinto.

By MetalMiner:
By Stuart Burns
Rio Tinto (RIO) often gets beaten up for an over-reliance on iron ore as a revenue stream. Buying Alcan at a 65% premium back in 2007 to widen its sources of revenue and hence spread its risk might earn Rio the title of ‘most disastrous diversification attempt.’

By MetalMiner:
By Stuart Burns
Copper, the perennial driver of the China bull narrative, is beginning to look less firm in the coming years than we have come to expect in the past. Building on a copper presentation we gave at the MetalMiner and Spend Matters Commodity EDGE conference in Chicago last week, we would like to step back from day-to-day copper movements and look at the longer term.

By MetalMiner:
By Stuart Burns
An article this week in the Financial Times suggests the current rise in copper prices is a result of growing concerns about the ongoing strike at the Escondida copper mine in the Atacama desert in Chile. The suggestion is the Escondida strike, which is entering its sixth day, is raising fears of supply shortages.

Hedge funds are betting that the worst is yet to come for copper.
Prices for the metal used in everything from homes to cars to appliances are stuck in the worst slump in more than two years. Stockpiles jumped 11 per cent in Shanghai last week. With China’s economy showing little signs of recovery, money managers are increasing wagers that copper will fall further, pushing their net-short position to the most bearish since April 2013, U.S. government data show.

The Mongolian government and Rio Tinto have not yet reached an agreement on whether the miner can repatriate earnings from the $6.2 billion Oyu Tolgoi mine, the country’s mining minister said, delaying first copper shipments.
The dispute could heighten investor concerns about the risks of mining in Mongolia and threaten Rio Tinto’s plans to grow its copper portfolio to ease dependence on iron ore.

By Frank Holmes:The U.S. mining industry was dealt a devastating blow as Kennecott Utah Copper's Bingham Canyon Mine experienced a pit wall failure causing a massive landslide with rocks and dirt covering the bottom of the mine pit. It's a miracle no one was hurt due to the vigilance of its owner, Rio Tinto (NYSE: RIO).

By MetalMiner:
By Stuart Burns
In the midst of CESCO Conference Week in Santiago, Chile, a potentially crippling strike spreading from miners to port workers threatens to cut supplies from the world’s largest producer.